NEW YORK Noranda Aluminum
Holding Corp. reported a slide in net income during the first
three months of the year but remains bullish on the aluminum
sector, despite volatile price movements on the London Metal
The Franklin, Tenn.-based
aluminum producer posted net income of $16.2 million in
the first quarter, down nearly 34 percent from $24.4 million in
the fourth quarter and off almost 58 percent from $38.3 million
recorded in the same quarter last year. Sales rose 4 percent
vs. the fourth quarter to $353.5 million but dropped 10 percent
from the first quarter of 2011, which the company attributed to
the declining price of aluminum on the LME.
macro-economic concerns, particularily the European
sovereign-debt crisis and fears of slowing economic growth in
China, have dampened LME aluminum prices since the second half
of 2011," the company said in its earnings statement.
Three-month aluminum on the LME
closed at $2,080.5 per tonne Wednesday, down 2 percent from an
April high of $2,125 per tonne and well below prices near
$2,800 a tonne reported at this time last year.
But while the company expects
there will be more volatility ahead, Noranda president and
chief executive officer Layle K. (Kip) Smith said he is
confident that demand for the companys aluminum products
will remain solid.
"Its very difficult to
forecast where the Midwest premium and LME prices will go.
(But) we strongly believe one of the reasons were so
bullish on aluminum in the medium and long-term ... is due to
fundamental demand. Demand for aluminum continues to be solid,
and we believe that will continue," Smith said on an earnings
The company shipped 93.4 million
pounds of flat-rolled products to third parties in the first
quarter, up 2.3 percent from 91.3 million pounds in the same
quarter last year, while primary aluminum shipments dropped
nearly 6.5 percent to 121.5 million pounds from 129.9 million
pounds in the year-ago period.
The company is still pushing forward with the expansion at
its New Madrid, Mo., smelter, Smith said Wednesday. Although
the company previously said the expansion, which will involve
replacing rectifiers and expanding production by 35 million
pounds per year, would come online in 2013 (AMM, Feb.
16), Smith said this week it will begin production sometime in
2013 with ramp-up completed by 2014.